The Indian government is launching the Indian Carbon Market (ICM), which aims to decarbonize the country’s economy by pricing greenhouse gas (GHG) emissions through trading of carbon credit certificates. The Bureau of Energy Efficiency, Ministry of Power, along with the Ministry of Environment, Forest & Climate Change, is developing the Carbon Credit Trading Scheme to achieve this objective.
A one-day stakeholder consultation was held in New Delhi to discuss the Accredited Carbon Verifiers under ICM. The participants were drawn from key stakeholders, including Accredited Energy Auditors, Carbon/Energy Verifiers, and Sector Experts. India currently has an energy savings-based market mechanism, and the new Carbon Credit Trading Scheme will enhance the energy transition efforts with an increased scope that will cover the potential energy sectors in India.
The ICM will enable the creation of a competitive market that can provide incentives to climate actors to adopt low-cost options. It can be a vehicle for mobilizing a significant portion of the investments required by the Indian economy to transition toward low-carbon pathways. A well-designed, competitive carbon market mechanism would enable the reduction of GHG emissions at the least cost, both at the level of entity, as well as the overall sector and drive faster adoption of clean technologies, in a growing economy like India.
The ICM will develop methodologies for estimating carbon emissions reductions and removals from various registered projects and stipulate the required validation, registration, verification, and issuance processes to operationalize the scheme. Monitoring, Reporting, Verification (MRV) guidelines for the emissions scheme will also be developed after consultation. A comprehensive institutional and governance structure will be set up with specific roles of each party involved in the execution of ICM.
India has been at the forefront of climate action to meet the climate goals through its ambitious Nationally Determined Contributions (NDC). To facilitate the achievement of India’s enhanced climate targets and to meet the future goals, the government is developing the ICM. By accelerating the transition to a low-carbon economy, the ICM will facilitate the NDC goal of reducing Emissions Intensity of the GDP by 45 percent by 2030 against 2005 levels.
Overall, the ICM will mobilize new mitigation opportunities through demand for emission credits by private and public entities. The scheme will facilitate faster adoption of clean technologies and drive India’s transition towards a low-carbon economy.